Harvested U.S. acres probably were better than originally thought considering the Midwest drought, says Smith.

“Some growers caught later rains that were too late for corn. The Delta region had big acreage increases and the Dakotas and Nebraska had large increases. The biggest shifts downward were in Indiana and Arkansas relative to what they usually grow.”

Growers in Southern states are expected to continue to increase their soybean acreage this year, says Smith.

“The U.S. yield trend, projected out to 2013, is expected to be more than 44 bushels per acre. The drought will have a continued impact based on projections, but we should see higher yields for this year,” he says.

Looking at overall supply and demand, in the last two years, U.S. production has been just over 3 billion bushels, falling slightly below total use. “High prices have worked our consumption down from a high of 3.36 billion bushels in 2009.

“So we’re still in a tight supply/demand situation going into 2013. Fundamentally, soybeans would appear to be stronger and more bullish. We need more soybeans this year to build up stocks.”

U.S. production has been raised to just more than 3 billion bushels, leaving a total supply of 3.2 billion bushels for this marketing year, says Smith.

Exports dropped slightly, but expectations are that when Brazil and Argentina complete their harvest, China will begin moving its purchases away from the U.S. and towards South America, he says.

“The major world exporters of soybeans are the United States, Argentina and Brazil. Brazil will pass us this year in terms of total exports.

“All of South America has been the largest exporter of soybeans for some time now. The major importers import about 86 million metric tons, with 63 million of that being imported by China.”

Instead of importing meal and oil like they once did, China has built a lot of crushing capacity, so they’ve become the largest crusher in the world, passing the U.S. in 2009-2010, says Smith.